May

Regional Economy

• Our most recent surveys suggested softening conditions in both the manufacturing and the service sector in April. The manufacturing composite diffusion index fell from 2 in March to −53 in April. Meanwhile, in the service sector, the overall revenues index fell from 1 in March to −87 in April. Survey results suggested a drop in employment and hours worked in both the manufacturing and service sectors in April.
• Total nonfarm payroll employment in the Fifth District decreased by 88,500 jobs, on net, in March. Jobs were lost in every District jurisdiction. The most jobs were lost in Virginia (28,600 jobs), followed by North Carolina (22,600 jobs).
• On a year-over-year basis, payroll employment in the Fifth District grew 0.5 percent. Employment increased over the year in every District jurisdiction except for West Virginia, where it fell by 1.7 percent. South Carolina registered the strongest growth at 1.3 percent.
• The unemployment rate in the Fifth District rose to 3.7 percent in March, 0.5 percentage point above its reading from February and level with its reading from March 2019. Fifth District unemployment rates increased or held steady in all jurisdictions in January, and ranged from 2.6 percent in South Carolina to 6.1 percent in the West Virginia.
• From February 2019 to February 2020, home prices in the Fifth District grew 4.1 percent, level with the national growth rate. Home prices increased over the year in every jurisdiction. West Virginia saw the fastest year-over-year home price growth (5.6 percent), while the slowest growth was reported in Maryland (2.9 percent).

Sources: Snapshot, Regional Economy, Bureau of Labor Statistics, CoreLogic 

National Economy

• According to the advance estimate released by the Bureau of Economic Analysis, real gross domestic product (GDP) declined at an annual rate of 4.8 percent in the first quarter of 2020. This was the largest decline in Real GDP since the great recession and was due, in part, to the shutdown and stay-at-home orders issued in March in response to the COVID-19 outbreak.
• The decline in first quarter real GDP reflected negative contributions from personal consumption expenditures (PCE), nonresidential fixed investment, and private inventory investment, which were partially offset by positive contributions from government spending, residential fixed investment, and net exports.
• According to the advance estimate, real PCE contracted 7.6 percent in the first quarter, which was the sharpest decline since the second quarter of 1980. The largest declines were for spending on health care services, food services and accommodations, recreation, and motor vehicles. Spending on food and beverages for off-premises consumption, on the other hand, rose sharply in the first quarter.
• Growth in residential fixed investment registered at 21.0 percent in the first quarter, up from 6.5 percent in the fourth quarter of 2019 and was the third consecutive quarter of positive growth. Meanwhile, nonresidential fixed investment declined at an annual rate of 8.6 percent in the first quarter of 2020.
• Inflation, as measured by the consumer price index (CPI), fell from 2.3 percent in February to 1.5 percent in March while year-over-year growth in core CPI, which excludes food and energy, dropped to 2.1 percent in the month.
• Employers in the U.S. cut 701,000 jobs from the economy in March 2020, most of which came from the leisure and hospitality industry (459,000 jobs) that was negatively impacted by the COVID-19 outbreak. Other hard hit industries, such as retail, education and health services, and professional and business services reported relatively large declines in the month.

Sources: Bureau of Economic Analysis, Bureau of Labor Statistics